Flags at Half Staff

Office of the Governor Rick Perry:

The State of Texas has been deeply affected by the injuries and loss of life that resulted from the recent motel fire in the City of Houston. It seems fitting that flags should be flown at half-staff on the day of the memorial service as a mark of respect for those brave firefighters who perished while serving their community.

Therefore, pursuant to Texas Government Code Chapter 3100 and acting in my capacity as the Governor of the State of Texas, I hereby direct the lowering of State of Texas flags to half-staff on Wednesday, June 5, 2013. Flags should return to full-staff on the next day, Thursday, June 6, 2013.

Please notify personnel within your agency and other state agency and university leaders of this directive. Flags should be flown at half-staff for the same length of time at all State of Texas offices and facilities in other states and abroad. Individuals, businesses, municipalities, counties and other political subdivisions are encouraged to fly their flags at half-staff for the same length of time as a sign of respect.

Anita and I send our deepest condolences and prayers to the families and support personnel touched by this terrible event.

West Relief Donations

AUSTIN, Texas—The Independent Bankers Association of Texas (IBAT) and the Texas Bankers Association (TBA) joined together to establish the Texas Bankers Disaster Relief Fund following the devastating fertilizer plant explosion in West, Texas. The donations collected through this fund will be presented to West’s POINTWEST Bank and The State National Bank on Friday, May 31, at 10 a.m. during a ceremony held at POINTWEST BANK.

Chris Williston, president and chief executive officer of IBAT, and Eric Sandberg, president and chief executive officer of TBA, will present the relief fund check to Charles Nemec, president and chief executive officer of POINTWEST Bank, and Dalbert Thiele, president of The State National Bank. These local banks are playing a key role in helping the community, including their impacted employees, rebuild and recover.

IBAT and TBA kicked off the relief fund by contributing $1,000 each. Thanks to generous donations from bankers throughout Texas, more than $143,500 in relief donations was raised. The fund will be used to provide assistance with “unfunded needs”—anything not covered by insurance or government assistance—in the West community. The purpose of these funds, which will be coordinated and led by the two local banks, is to help the community recover and move past this tragic incident.

The Texas Bankers Foundation coordinated donations, and 100 percent of every dollar collected went directly into the fund to now be used for local relief efforts.

About the Independent Bankers Association of Texas

IBAT is the largest state community banking organization in the nation with a membership of more than 2,000 banks and branches in 700 Texas communities.

About the Texas Bankers Association

TBA represents the Texas banking industry—with members ranging from the smallest bank in the nation to the largest bank in the nation. This includes 85 percent of Texas banks, 5,200 bank branches and 95 percent of Texas deposits.

FNB Hebbronville Anniversary

On Saturday, May 25, 2013, the First National Bank of Hebbronville celebrated "a century of strong and independent community banking."  Curt Nelson of IBAT attended the celebration last weekend and presented the bank with a congratulatory Resolution on behalf of the IBAT Board of Directors.  Israel Hinojosa, President & CEO of FNB Hebbronville, expressed his appreciation by saying: "We really appreciate all IBAT does for us and are proud to be members of IBAT."

The bank's website proudly displays the special 100th anniversary logo.

CFPB Mortgage Rule Clarification: Part Five

In order to provide additional clarification on the recently issued CFPB mortgage reforms, IBAT Regulatory Compliance Manager Kelly Goulart is releasing a series of white papers addressing each change contained in the seven major mortgage lending initiatives, six of which have been finalized by the CFPB (more or less).  

The fifth part of the series, focused on the expansion of HOEPA coverage and additional prohibitions, is now online.

Previous documents in the series can be found here:
Equal Credit Opportunity Act (ECOA) and Higher Priced Mortgage Loan (HPML) rules
Ability to Repay (ATR) and Qualified Mortgage Rules
Escrow requirements for HPMLs
Regulation Z - Prohibited Acts or Practices

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

How Did IBAT Fare in the TX Lege?

As the 83rd Regular Session of the Texas Legislature wrapped up Monday, only to be followed by the beginning of the First Called Special Session later in the afternoon, IBAT Executive Vice President Steve Scurlock sent the final edition of Legislative Insider detailing the events of the last week. IBAT will provide a thorough review of the 83rd Session and its impact on your bank in a free webinar, scheduled for June 25 from 3:00 to 4:30p.m. A link to register can be found here.

"We're cautiously optimistic until the Governor signs bills passed during the 83rd, but we were able to accomplish several of the items on our proactive agenda, and we consider those great victories for community banks," Scurlock said.

In particular, Scurlock highlighted the prohibition of surcharges on debit card purchases and timely payoff notice provisions in tax-lien lender legislation as two significant measures passed for the benefit of both Texas consumers and IBAT members.

"We'll take a quick moment to celebrate the work of the past 140 days," Scurlock added, "and return to our primary focus - full-scale regulatory relief efforts currently before Congress."

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Week in Review - May 24

In an effort to save government employees some time and trouble, they should know that if they ever want to tap the phones or read the e-mails of the Baker Market Update, they're in for an exercise in boredom. What was not an exercise in boredom [last] week was following the roller-coaster ride of the Ten Year Treasury Note. At the week's outset, that Benchmark issue was yielding in the low 1.90%'s. Wednesday's big sell-off took the yield up to near 2.05% before aimless wandering (the best kind of wandering) brought it back down to [Friday] morning's sub-2% level... Read more in the Baker Market Update.

Staff contact: Mike Mackey, mikem@gobaker.com, 512-320-0301

Memorial Day

In observance of Memorial Day, the IBAT office will be closed on Monday, May 27. Regular business hours will resume Tuesday, May 28, 2013.

We hope everyone enjoys this year's Memorial Day weekend and give pause to the tremendous freedoms we enjoy as Americans, with thanks to the many men and women who have died to ensure those freedoms.

CFPB Rural Exemption

As reported in several issues of Bottom Line, IBAT has communicated with the CFPB, in writing and in person, to attempt to get some relief from the CFPB’s defined delineation of "rural" before the Escrow Requirements under the Truth in Lending Act rule (Escrows Rule) go into effect on June 1, 2013 and require certain creditors to create escrow accounts for a minimum of 5 years for HPMLs. The rule exempts HPMLs made by certain small creditors that operate predominantly in rural or underserved counties from this requirement. On March 12, 2013, the CFPB posted a preliminary list of counties that are rural or underserved (or both).

The CFPB's blog reports that the final rule based on the proposed rule that the CFPB used to compile the preliminary list is being issued. Because the methods for determining rural and underserved status have not changed from the proposed rule, this final list is identical to the preliminary list the CFPB posted on March 12. According to the blog, "for purposes of applying the exemption in the Escrows Rule, creditors may rely on this list as a safe harbor to determine whether a county is 'rural' or 'underserved' for loans made from June 1, 2013, through December 31, 2013."

Several CFPB rules have provisions related to mortgage loans made in rural or underserved counties: Ability-to-Repay/QM rule, HOEPA homeownership counseling rule, and appraisals for HPMLs. IBAT’s map of rural and underserved counties designated by the CFPB is available on the IBAT website

Dell SecureWorks: Cyber Security

With new threats issued by hacktivists each week, cyber security is a constant concern for community bankers.  However, with proper planning, you can reduce the expense and difficulty of addressing an eventual breach.  

Jeff Multz of Dell SecureWorks recently penned a free white paper entitled "Preparing to succeed when your computer network is threatened," providing step by step instructions on developing and implementing a Computer Incident Response Plan (CIRP).

H.B. 3068 Update

H.B. 3068, the IBAT-initiated bill prohibiting retailers from assessing a surcharge on debit card transactions at the point of sale, was passed by the Texas Senate on Friday by a vote of 25-5.  Throughout the legislative process, the bill faced opposition and was targeted by retail groups as well as a conservative organization.  Engagement and numerous contacts with elected officials by IBAT members, however, helped drive support for the bill among lawmakers.

"As the Durbin Amendment to Dodd-Frank Act removed long-standing prohibitions on steering of transactions, IBAT felt that it was essential to protect consumer choice at the point of sale and ensure that community bank debit cards are not discriminated against due to arrangements between retailers and the big banks," said IBAT Executive Vice President Steve Scurlock.  "We're pleased that Texas will be among the first states to offer such protection."

The bill will head to the governor's desk following a brief technical stop back in the Texas House of Representatives later this week.

H.B. 3068 is just one of the many issues IBAT has addressed in the 83rd Regular Session of the Texas Legislature.  As is customary, IBAT will provide a thorough review of the Texas Legislative Session via a webinar conducted by Karen Neeley and Steve Scurlock on June 25, from 3:00 PM until 4:30 PM.  There is no charge, and the program will be recorded for future reference. Additionally, our post-session White Paper should be ready for distribution electronically prior to the program date.  

We hope you plan to join us for an informative discussion on issues impacting the community banking industry. Click here to register for the webinar.

Mortgage Rule Clarification Part 4

In order to provide additional clarification on the recently issued CFPB mortgage reforms, IBAT Regulatory Compliance Manager Kelly Goulart is releasing a series of white papers addressing each change contained in the seven major mortgage lending initiatives, six of which have been finalized by the CFPB (more or less).  

The fourth part of the series, focused on the Equal Credit Opportunity Act (ECOA) and Higher Priced Mortgage Loan (HPML) rules and notices, is now available on the IBAT website.

Previous documents in the series can be found here:
Ability to Repay (ATR) and Qualified Mortgage Rules
Escrow requirements for HPMLs
Regulation Z - Prohibited Acts or Practices

Time to End TBTF!

Late last week, the IBAT Board of Directors unanimously voted to support S.798, the Brown-Vitter bill designed to end too big to fail. The legislation, one of a number of bills that have been introduced in the 113th Congress to address the widespread sentiment that too big to fail is still alive and well and was not eliminated in the passage of Dodd-Frank, is gaining considerable momentum. Prominent industry leaders, including Dallas Federal Reserve Bank President Richard Fisher and FDIC Board Vice Chairman Tom Hoenig, have been leading the chorus who believe that another financial crisis would put American taxpayer dollars at risk.

In an email to Texas Senators John Cornyn and Ted Cruz, IBAT president and CEO Chris Williston touted the positive elements of the bill.  "Given the fact that [S.798] eliminates future bailouts of large systemically important financial institutions by the American taxpayer, eliminates potential Basel III application for community banks and provides much needed regulatory relief for the industry, it is obvious to us that S.798 is the most logical vehicle to address the future competitiveness of all industry stakeholders and restore consumer confidence in our financial system," Williston said.

The legislation requires that institutions over $50 billion in assets maintain capital levels of 8%, with the requirement increasing to 15% for institutions over $500 billion.  Community banks under $50 billion would not be subject to Basel III capital standards adopted by all federal regulatory agencies.  IBAT acknowledged that certain other components of the Basel III standards, as proposed for community banks in the legislation, needed to be eliminated.  "The IBAT Board instructed staff to work to eliminate any aspects of the Basel III proposal, specifically the inclusion of Accumulated Other Comprehensive Income (AOCI) in any final capital calculation and its applicability to community banks," Williston said.

It is likely that the banking industry will be divided over the legislation.  The big banks and their trade organizations are staunchly opposed and have unleashed a plethora of lobbyists to work on their behalf to defeat the legislation. Community bank groups widely favor the proposal.  Williston concluded, "This legislation acknowledges what IBAT has long advocated and has been working to achieve... recognition that one-size-fits-all regulation makes no sense when you contrast the business models of community banks and the financial conglomerates."

West Relief Update

Thanks to your outpouring of support, IBAT and TBA will travel to West on Friday, May 31, to present a check totaling more than $140,000 to help our local community bankers following the aftermath of the April fertilizer plant explosion.  Several members of our IBAT family suffered devastating losses and this money will help them with expenses.  After the needs of our IBAT family members have been met, PointWest Bank and The State National Bank will direct the remaining funds to help the community in their rebuilding efforts.  Be assured that 100% of the funds you contributed will go to this effort.  Thank you for your generosity to assist your fellow community bankers and the community of West.